Real Estate Agent Magazine Law and Ethics Referral Marketing: Pay Attention to Details

Referral Marketing: Pay Attention to Details

Do not approach owners of properties listed on MLS for referrals – even though this would not constitute soliciting another broker’s listing, it still violates Article 16 of the REALTORS(r) Code of Ethics.

Q: I belong to a large referral network across the U.S. When showing listings of other real estate professionals, when home sellers are present I would like to offer my relocation services by offering to refer them to another broker who operates where they’re moving – without ever criticizing their listing agent of course! Flyers regarding my relocation services would also be left at homes for sale signs as an added service – I do not intend on soliciting their listings! But is this allowed?

A: Article 16 of the Code of Ethics states that REALTORs(r) shall not engage in any practice or take any actions which violate exclusive representation agreements that other REALTORs(r) have with clients.

Your service you are considering is of course different. For instance, if someone approached you at a social event like Rotary Club meeting and mentioned they had their home for sale, offering relocation services might be appropriate; however, targeting listings from multiple listing services directly would violate two standards of practice under Article 16 which address this.

Standard of Practice 16-3: Article 16 does not restrict REALTORs(r) from approaching clients of another broker with the purpose of offering, entering into contracts for, or otherwise engaging in providing different real estate services than those currently provided (e.g. property management as opposed to brokerage) or offering the same type of service but for properties not subject to other brokers’ exclusive agreements; however information received through multiple listing services or offers of cooperation should not be used to target such offers for services from other REALTORS(r). (Amended 1/04)

Standard of Practice 16-18 states: REALTORS(r) shall not use information obtained from listing brokers through offers to cooperate through multiple listing services or any other offers of cooperation to refer their clients to other brokers, or create buyer/tenant relationships without first receiving authorization from these listing brokers (Amended 1/22). (Amended 1/01/02).

Note: While the Code of Ethics may establish obligations that exceed those required by law, in cases where there is conflict between these obligations and law-mandated obligations, law must take precedence.

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